BEIJING
— IN a rare acknowledgment of top-level political conflict, senior leader Deng Xiaoping has denounced officials thwarting his effort to revive economic reforms in China.

The remarks apparently express Mr. Deng's growing frustration over the widely publicized but faltering drive for market-oriented reform he initiated in January.

The aging leader seeks to subdue conservative opponents to change and ensure that the Communist Party installs advocates for reform at its 14th congress in November, say three Chinese sources including one high-ranking official. High stakes

The stakes of Deng's effort are high; there have been reports of unrest in factories where managers, at the urging of reformers, are trying to slough off socialism's burdensome practices. The drive to eliminate China's job and wage guarantees has provoked worker suicides, protests, and military intervention at state-run factories, according to unconfirmed reports. (Watch factory reform, at right.)

Deng identified two kinds of rivals during a tour of the Capital Iron and Steel Corp. in Beijing on May 22, according to a high-ranking Chinese official who has been briefed about Deng's comments.

"One group just pays lip service to reform: They march for the campaign, shout the right slogans, but take no action," Deng said, according to the official, who requested anonymity.

"Another group of leftists simply ignores my speeches. They think they can hold out until the wind for reform dies down or I grow older; they have prepared self-criticisms but they haven't carried them out," Deng said.

"The remaining cadres work hard for reform and wish to make solid achievements rather than quarrel with leftists," Deng said, according to the official.

The government in recent years has tinkered with state-set prices and condoned limited experiments in shareholding. But it has shied away from decontrolling prices and endorsing private ownership, bold steps some Chinese economists assert are critical for streamlining the economy. Veteran revolutionaries who embrace orthodox Marxism have derailed sweeping reform initiatives since August 1988.

Deng sought to trigger a new burst of reform during a trip early this year to three robust, free-wheeling coastal cities in southern China. He called for the dismissal of conservative cadres and espoused policies of virtually any ideological stripe that would build the economy.

Although Chinese officials at all levels have voiced support for Deng's campaign, there has so far been little or no concrete evidence of major reforms.

At the Beijing steelworks Deng indirectly endorsed his reformist prots by slighting the conservative leaders who have obstructed reforms.

"No one in the leadership understands the economy," Deng said, according to the high-ranking official. Deng is said to favor the elevation at the congress of vice-premiers Tian Jiyun and Zhu Rongji, reformers with extensive hands-on experience in guiding the mixed economy.

Deng's brief morning tour at the steelworks sought to advance his effort to shake up hundreds of inefficient state-run industries.

The massive industrial complex was a pet enterprise of Zhao Ziyang, a leading figure for reform who was ousted as Communist Party general-secretary after the Tiananmen Square crackdown in 1989.

More than two-thirds of China's largest, state-run factories run at a loss and require massive subsidies that account for much of the government's growing budget deficit. The factories are especially wasteful in employment, retaining at least 26 percent more workers than necessary, say official press reports.

Reformers want to eliminate inefficiency by "smashing the three irons": the "iron wage," the "iron rice bowl" of lifetime employment, and the "iron chair" of a guaranteed position despite work performance.

Deng's rivals are trying to foil his streamlining effort or pit the discontent of workers in inefficient factories against him, Chinese analysts say.

"The leftists [conservatives] want to create conditions of instability among students or workers," says a Chinese educator on condition of anonymity. "They want to force Deng ... to oppose rightists [reformers]."

For example, on the day Deng visited the ironworks the Worker's Daily described a recent discussion of 109 economists and officials on "how workers can become masters of the country."

"It is wrong to use whips and hunger to force workers to work," said Wu Shuqing, president of Beijing University. "The iron rice bowl is the right to work of every citizen as stipulated in the constitution so it is illegal to smash the iron rice bowl."

People's Daily, the party newspaper and a stronghold of hard-liners, echoed the refrain in an editorial May 28, saying "enterprise reform must wholeheartedly rely on the working class.... Party and government leaders at all levels should not say anything that will make the workers resentful, such as `Breaking the three irons.'" Quick cleanup

Although obstructed in his reform drive, Deng clearly commands the hearts and minds of the 185,000 workers at the mill.

Deng's visit threw managers and workers into a frenzy of beautification. At least five workers died while cleaning the furnaces, smokestacks, and other facilities. The senior leader spent little more than an hour driving around the massive complex, a factory engineer said.